BBRG: Best Tool for Understanding the Market and Trump

The Best Tool for Understanding the Market and TrumpConsider the counterfactual. It puts this year’s paltry returns on stocks and the president’s popularity into perspective.Bloomberg, November 5, 2018

Consider the Counterfactual:

The term itself was coined by Nelson Goodman in his article, “The Problem of Counterfactual Conditionals.” But the idea has been around for a long time. Air Force Colonel John Boyd, who helped change the art of air warfare, said “If you want to understand something, take it to the extremes or examine its opposites.” Berkshire Hathaway’s Charles Munger famously said “Think forwards and backwards — invert, always invert.” (Though Munger lifted that phrase from Carl Gustav Jacob Jacobi, the great 19th century Prussian mathematician, he is often credited with the maxim.)